“Supporters insist the volume of trades that HFT shops provide generates a steady flow of awesome liquidity, giving Adam Smith's invisible hand a bionic upgrade by making it better, stronger and faster like Steve Austin in the Six Million Dollar Man (look it up here, kids).” (27 September)

“By avoiding that harsh reality and borrowing more and more, past UK governments have effectively plonked the country’s economic short-and-curlies in the invisible hand of the market – which is now rather agonisingly taking on the shape of a fist.” (26 Sept)

CommentsSpeechless. Believers in the modern (post-1948) myth of Adam Smith’s so-called ‘invisible hand of the market’ are welcome to explain these examples of the imagination.

(*) An irregular and irreverent series of nonsense about the invisible hand in today's media.

Monday, September 26, 2011

From The Adam Smith Institute Post on Panmure House

The restoration of Panmure House by Dr Eamonn Butler (25 September 2011)

"The plan to restore Adam Smith's old home in Edinburgh, Panmure House, is now getting underway in earnest. The only one of Smith's lifetime homes still standing, he resided there for the last nine years of his life, and held literary salons every Sunday when he would invite some of the leading intellectuals of the Scottish Enlightenment round to discuss ideas. Now the Edinburgh Business School at Heriot Watt University has bought the house to save it for future generations, and return to this tradition, creating an elegant space for meetings, debates and the arts.

It is not an easy job. It has taken three years (!) to get planning approval for the restoration. And sadly, this fine eighteenth-century townhouse is in a dangerous condition, reduced to a sorry state by three decades of local-authority occupation, as these pictures of the inside show (not shown here; see the pictures on the original post at Adam Smith Blog HERE: When restored, the same rooms (also pictured) will be quite magnificent. Work starts in March.

This week a fundraising panel at the Edinburgh Business School started work on raising the £5m needed to restore the house and keep it running, in use and indeed loved. If you would like to help this effort – or indeed contribute financially to the work of breathing life into Adam Smith's too-long-neglected him, do let me know: eamonn.butler@adamsmith.org"

Sunday, September 25, 2011

Adam Smith on Bargaining

[I am in France for a couple of weeks closing our house for the winter, and found on my Mac book a piece I was writing in the summer. I cannot recollect whether I posted it on Lost Legacy – a scroll back was inconclusive. Readers may remember that we left in a great hurry because of an emergency with a daughter’s pregnancy (Florence and baby Alexander are doing fine – the boy is now a healthy 8lbs 13oz; his mother is joyful and tired)].

However, here is the un-posted piece:

“The famous and frequently quoted passage of ‘the butcher, the brewer, and the baker’ (WN I.ii.2, pp 26-7) as a dominating force in exchange, together with the well-known passages about the invisible hand, have given rise to a too narrow and biased perception of Smith’s thought within neoclassical economics, either distorting or simply ignoring his moral views” (Montes, 2004, 56).

Leonidas Montes is on the right track here and if we unpack his paragraph we can see why.

There is no doubt that this paragraph is both a “famous and frequently quoted” passage, though in truth I would add that it is as frequently misunderstood as it is quoted. In fact, I would go so far as to assert that I have only found one reference to an accurate, and thereby promising, account of what Adam Smith was actually saying in this passage, and that this gem came from an unpromising and unpretentious 19th-century source:

“It has been customary to describe Political Economy as the dismal science , as the gospel of selfishness. In the hand of Ricardo and his disciples, Political Economy was certainly gloomy enough, and its gospel forbidding; but Smith’s conception of economic science as it did the co-operative and sympathetic side of life, was eminently hopeful and enervating. His view of the industrial order was wide enough to give full play to that subtle psychological chemistry by which egoism is transmuted into altruism. In Smith’s word: ‘In civilised society man stands at all times in need of the cooperation and assistance of great multitudes, while is whole life is scarce sufficient to gain the friendship of a few persons.’ In such a state, as Smith goes on to show, man can most satisfactorily connect himself to his fellows through the medium of the reciprocity of services – a process which invests self-interest with a social and ethical quality. From this social and ethical germ develops all the higher virtues of civilisation.” (Macpherson, H.C. 1899. Adam Smith. Famous Scots Series, Oliphant Anderson & Ferrier, Edinburgh).

The ‘butcher, brewer, and baker’ passage in Wealth Of Nations says exactly the reverse meaning to that which is commonly attributed to it by most modern economists (we cannot blame them alone because that is what they were taught by their tutors, themselves taught by their tutors – none of them bothering to read the passage carefully enough).

Yes, it is about self-interest; however, it is not about approaching the acquisition of your dinner, or of supplying it, solely dominated by consideration for one’s own self-interest. Far from it! The passage Wealth Of Nation, Book I, chapter 2, p 26-7) specifically states that one should not appeal to one’s own self-interest in attempting to conclude a bargain with the ‘butcher, brewer, and baker’, or anybody else for that matter, but we must address the self-interest of the other party.

He has already defined the nature of a bargain a few lines before the famous passage: ‘Give me this that I want, and you shall have this that you want’. This is the conditional proposition in the form: 'If you give me this, I shall give you that' (If-THEN).

Bargaining is an exchange, not something for nothing. To get some of what we want from someone, we have to give them some of what they want in exchange. The amounts that are exchanged are variable (negotiable). Moreover, we must address their self-interests (self-love), and definitely not only ours. The self-interested egoist is more likely to be disappointed and deservedly so.

Negotiation exchanges between to self-interested egoists are likely to end in deadlock, but negotiated exchanges between self-interested persons who are also other-regarding, which is the essence of Smith’s advice to those seeking the contents of their dinner from others, are likely to be rewarded.

Why readers of Adam Smith's Wealth Of Nations and his Moral Sentiments cannot get that right is itself a mystery, as I regularly found in many years taking of literally thousands of managers through negotiation courses at the Edinburgh Business School.

Friday, September 23, 2011

Book Review of Robert H. Frank's The Darwin Economy'

A Review of Robert H. Frank, ‘The Darwin Economy: liberty, competition, and the common good’, Princeton, New Jersey, Princeton University Press. September 2011.

PART ONE

Professor Frank, of Cornel University’s Johnson Graduate School of Management, opens his book with the:

“prediction that economists a hundred years from now will be more likely to name Charles Darwin than Adam Smith as the intellectual founder of their discipline” (xii).

The ‘Darwin Economy’ attempts to defend that prediction in what follows, and I shall address my reservations with it later, based on what Frank assembles as his evidence primarily in the first five chapters of his twelve chapter book.

In those remaining seven chapters, Frank presents in a clear and well-written, if sometimes repetitive manner, his case for progressive income re-distribution, pollution-sensitive taxation, a mixed economy, without prejudice against public expenditure, much less inequality of incomes, and appropriate levels of government expenditure and necessary interventions. Much of what Frank writes is worthy of consideration if you can cut through the general polemical tone in which it is presented.

While the other side are represented by notably softer labels such as ‘liberal friends’, ‘liberal commentators’, ‘mature adults’, ‘commentators on the left’, and ‘critics on the left’. Like Cromwell (paraphrasing), Frank knows who he loves and what he hates; loves what he knows and hates the ideas of those with whom he disagrees. In short, he is partisan, rather than balanced.

Frank’s book is a critique of that strain in politics broadly summarised in the UK and the US by what the centre-right is for, and by definition, what he is against. He addresses standard, and not so standard, economic concepts, plus using some ‘thought experiments’ and other little teasers showing why his positions on the current ills that are common in capitalist societies are sensible, and the above medley of rightist ideologues (i.e., anybody not of a leftish disposition), among economists, politicians, who are not sensible but even positively dangerous, because in his view the rightist’ medley is leading the US and the rest of the world to disaster (or at least, severe, because unnecessary, sub-optimal outcomes). He reveals is own concerns about educating children in good neighbourhood schools by relocating rather than structural reform (school vouchers are not proposed or discussed).

Economists will recognise much of standard economic theory – and not a few little gems for today’s lecturers to use in undergraduate tutorials and in those outside engagements of non-economists that they are no doubt invited to address on occasion (Frank, remember, teaches in a management school where such outside engagements provide regular sources of income for faculty and/or the school).

Frank’s account of the derivation of the Coase theorem is a good case in point, as is his clear statement and applied examples of it. I enjoyed reading his account and his elaborating on the issues with several examples of its application. These also expose some of the weaknesses in the Coase-type argument. If I remember correctly, from an original account of the Chicago meeting, there were disagreements among the select audience of those attending, and some notable ‘failures to agree’ (see Steven Medema’s, The Hesitant hand: taming self-interest in the history of economic ideas, Princeton University Press).

One such is the doctor in practise near by a noisy factory (an externality) and the issue was which party should compensate the other, i.e., which party is liable. Coase presented this against a background that private pair-wise negotiations can stall because transaction costs in private negotiation can be expensive. Government intervention in private disputes aims to assign liability, usually, on the moral basis of which party is the perpetrator of the problem.

Coase came up with what appeared to be startling results, broadly that it is not obvious that the doctor, the victim, should not move his practise, at some personal financial cost, as opposed to the factory, as the perpetrator, funding the necessary measures to reduce the noise. In fact, it did not matter economically which party paid at the behest of the government – the factory to reduce the noise at some cost or the doctor to pay the cost of his moving. (I remember being taught in the 60s the application of the Coase Theorem in a conflict between a cattle rancher and a farmer.) At issue was which was the efficient solution?

If sound proofing cost $5,000 to fix, and moving would cost the doctor $10,000, then the most efficient decision should be for the factory to pay to sound-proof its noisy machinery. Yes, but the decision might change if it would cost $5,000 for the doctor to pay the factory for the sound proofing, against $10,000 for moving. The range opens up a negotiation possibility (see any negotiation theory text on the 'settlement range'). However, not discussed by Frank is the real possibility that if the doctor moves, and somebody else moves into his premises, and the noise remains unsound proofed, the costs are imposed on the new owner/tenant, and all those tenants that might follow, would add up to a larger sum than the factory owner paying the cost of sound-proofing, hence the liability could shift.

Another possible teaser is Frank’s case of two buyers, Susan, a school teacher, and Malcolm a salaried executive, both coming from different circumstances, eyeing a rare clock in an antique shop. The most that Susan could pay is $5,000 (earnings of $28,000 per year) and the most that Malcolm would pay is $10,000 (earnings of $950,000 per year). Frank adds other details loaded to attract sympathy for Susan and hints of opprobrium for Malcolm (a device he uses elsewhere). Who should get the rare clock? The market, says Frank, would dictate the rare clock going to Malcolm; social justice, he implies, that it should go to Susan. Similarly, with over-booked flights; the most deserving passengers lose out apparently in bids for the over-booked seats and the losers have to wait for other flights, perhaps with some compensation, but perhaps also in sad circumstances of frustrating their urgency to get on board to visit a sick relative in a hospital.

There are nagging doubts about the lessons that Frank draws from these cases in the background social reasons he draws upon to make his case that the undeserving rich always get the unfair gravy and the deserving poor only get the beans. Readers may draw other inferences from these cases, such as when Frank adds to the Susan and Malcolm parable the remark that ‘they’re the only two interested cases’ in the unfair contest to acquire the rare antique clock (p 106).

I would hope that bright students in his classes would draw attention to Frank’s slip of ‘only two interested parties’ involved in the price paid by the person who finally acquires the clock. There is always another party involved when two buyers haggle what they are prepared to pay – yes, the seller, the forgotten player who also has direct interests in the outcome. She might need the cash to pay for an expensive operation for her sick child- see how easy it is to write contexts to suit a political slant? Frank does that all the time, and his bright students may tire of his continual writing the cases to play to his particular views of how the world should be re-arrange to suit his political perspectives.

Robert Frank's Book: a Review (continued)

A Review of Robert H. Frank, ‘The Darwin Economy: liberty, competition, and the common good’, Princeton, New Jersey, Princeton University Press. September 2011.

PART TWO

This brings me to a fundamental problem with Frank’s perspective (though I have no political axe to grind). His entire thesis about Adam Smith is based on a set of myths created in the 20th century by modern economists, one ubiquitous example spread notably by Paul Samuelson (Kennedy. G. 2010. ‘Paul Samuelson and the Invention of the Modern Economics of the Invisible Hand’. History of Economic Ideas, xviii/2010/3)

I refer to the modern myths of the use of Adam Smith’s ‘invisible hand’. Frank refers to this myth 32 times on my count, though they may be more. Smith used the IH metaphor twice only in his books published in this lifetime (Moral Sentiments and Wealth Of Nations). The metaphor was quite popular in the 17th-18th centuries (Peter Harrison of Oxford lists over 40 occasions; History of Ideas, 2010) before Smith used it. I have discussed it on Lost Legacy almost every week since 2005. I shall not rehearse Smith’s meaning here (scroll down this year’s posts for my analysis of the IH metaphor; see also Kennedy, G. 2011. “Adam Smith and the Role of the Invisible Hand”, Economic Affairs, Vol. 31, Issue 1, 43-52).

To state it bluntly, Frank and most modern economists purvey a myth of the IH metaphor. Smith’s use was hardly commented on while he lived and during much of the 19th century, and numbered only about a half-dozen mentions from 1875-1900). Even in the early decades of the 20th century, it remained within an oral tradition at Cambridge (UK) and Chicago (US), with less than an handful of published comments (eg., Pigou, Gray, and Lange).

It began its modern journey to ubiquity after Samuelson’s text, Economics, in 1948, and through its 20 editions to 2010 – but Samuelson got it wrong (for details see my two references above). Frank calls it ‘a genuinely revolutionary insight’ (p 17) and ‘an extraordinary narrative’ (p 18). He continues that ‘behind the invisible hand is greed’. Yet Smith never said such a thing. In fact, this suggests that Frank in not familiar with Smith’s views on ‘greed’ (see Moral Sentiments on Bernard Mandeville’s ‘licentious’ philosophy), nor, incidentally with Smith’s qualification of self-interest by the need for bargainers to be ‘other regarding’ and not just self-regarding, as shown, for example, in the very quotation by Frank of Smith’s ‘most widely quoted passage in Wealth Of Nations’ (p 33), which he quotes, but misreads completely (see WM, I.ii.2: p 26-7).

This brings me to recall the ‘prediction’ Frank makes “that economists a hundred years from now will be more likely to name Charles Darwin than Adam Smith as the intellectual founder of their discipline” (xii). I have no particular view on futile modern arguments about Adam Smith’s status as the ‘intellectual founder’ or ‘father of economics’, and such like, nor any axe to grind about other supposed ‘fathers’ or 'grand fathers'. But I am familiar with the work of Charles Darwin and I find Frank’s treatment disappointing.

Natural selection works through the individual, not the group. So when Frank writes: ‘A mutation that codes for keener eyesight in one particular hawk … serves the interests of every individual, but its inevitable spread also makes hawks as a species more successful’ (p 7), showing signs of sloppiness about Darwin on natural selection. Similarly, with his account of the growth of larger antlers (p 21), which make bull elks with the larger antlers likely to win fights for females to the disadvantage of rivals with less powerful antlers. Yes, but the process by which the genes for larger antlers are transferred to others is via a blind and unintentional inter-generational transfer to the descendants of the powerful bulls who mate with more females and sire more descendants, than the bulls with smaller antlers, which is a definite disadvantage to existing bulls with the smaller antlers and their fewer descendants. Likewise with the hawks. The hawk with the sharper eyesight catches more food than those without that advantage, and its descendants spread, to the certain disadvantage (even the expense of) of the descendants of those with less sharp eyesight, which were out-competed for food. The females of this disadvantaged group have fewer surviving off-spring and over time, these differences in eyesight have a noticeable affect eventually on the relative proportions of eyesight quality (minute differences over long periods of time can cause significant quantitative changes). Similarly, for the bull elks. But there is nothing that the Hawks or Bulls can do about it. Truly, in evolution you must play only the cards with which you are dealt, unintentionally by your parents.

For Frank to conclude by asserting that ‘Darwin’s natural selection narrative closely tracks Smith’s invisible hand narrative’ is pure hyperbole in his idea of ‘closely tracks’ (p 20); they are not even related via the IH metaphor, as used by Smith. In fact, the IH metaphor’ was not even a ‘narrative’, it was, well, a metaphor – to understand the difference (see Adam Smith: Lectures on Rhetoric and Belles Lettres’, [1763] 1983, p 29, or the Oxford English Dictionary under metaphor).

Humans are able to make choices about courses of action, though not about natural selection; hawks, bull elks, and throughout all species, are not endowed with choices about their natural characteristics. They are subject to blind natural selection in Darwin’s account. No elk can endow itself with larger antlers, nor can any hawk create for itself sharper eyesight. Neither can humans but humans can adopt conscious behaviours or social arrangements that aim to be advantageous individually, though not necessarily advantageous for the group. Elks cannot stop arms races, though nature might, but humans can stop arms races. That is more than a Darwinian difference.

The entire history for the human species since it emerged from the hominine line is a testament to the outcomes of the choices that some humans made in contrast to that which other humans did not make – a few descendants left Africa for Asia and Europe, a few then went south towards Australia, later a few crossed the land bridge between Siberia and North America, some of those eventually left Alaska for the great plains east, others followed the mountains south. Whether any humans ever got (or have ever gotten, or ever will get) their social arrangements ‘right’ is pure opinion (and possibly a triumph of hope over experience). And we know Frank’s opinion of the current arrangements, because his book is an articulate testament to his dissatisfaction.

Neither the political economy enunciated by the Adam Smith born in 1723 in Kirkcaldy and/or the Charles Darwin of the 19th century can decide whether Frank’s hoped for changes to the world’s social arrangements will ever be realised. I am also sure that the cardboard constructs of the Adam Smith, supposedly ‘alive and well in Chicago’ (George Stigler), will have little to do with whatever happens in a 100 years time when future generations judge the relative merits of these two remarkable scientists. Remember, Adam Smith was not given to predict the future (with one exception, when he predicted that the former British colonies in North America would become richer than Europe by the 1880s).

We should read what Smith actually wrote in his Moral Sentiments and Wealth Of Nations and what Darwin wrote in his Origin of Species and his associated 4 volumes. We should not rely on the claims of modern epigones.

Monday, September 19, 2011

More on Toil and Its Economic Meaning

A correspondent writes privately to say (among other personal matters) that while he agrees with my stance on toil in Smith’s economics, he is confident that what non-humans do to survive and procreate also involves toil (from expending replaceable energy from previous consumption) .

I wrote:

‘True, birds build nests, Ants build hills, beavers build dams, and spiders spin webs, but this toil is for themselves in breeding formation, it’s not for co-entities of the species. There is no special effort on behalf of con-specifics. The ones who do the building, use them. Nor was there building for others for millions of years in the hominine line.’

For birds, ants, beavers, and spiders, and so on, where the output of their toil is for themselves and not con-specifics, as it became for humans, nevertheless it is describable as toil in some common ways to Smith’ sense. The toil activity requires effort on their part. He writes:

‘Anybody watching an ant struggle apparently with great determination when carrying a large leaf for its size and if it is dropped will admire the ant's persistence. The ant continues to apply considerable effort to succeed in the task, never giving up until the ant nest is reached. Likewise, a lion or leopard persists in its charge after a selected prey, though all its twists and turns, until bringing it down. The same tired and fed hunter will often sleep for hours in the heat of the day, like a human sunbather on holiday. Toil is manifest across the whole spectrum of life.’

The fact that inanimate nature’s bounty is ‘free’, according to John Greer, has no particular significance, because it still requires toil from all life-forms to release the potential for life continuing, and procreation in all its forms happening, from consuming the bounties of nature.

I am grateful for my correspondent’s helpful clarifying insight into this issue.

Sunday, September 18, 2011

There Is Toil and Toil - Understand the Difference

“Adam Smith got it way, way wrong!” “I love the way John Michael Greer's latest book, The Wealth of Nature, opens, with a good skewering of the premise on which the modern pseudo-science of economics depends. Exposing 18th century philosopher Adam Smith's thinking in The Wealth of Nations as flawed, Greer goes on to explain what Smith missed, why it's important, and how we can turn the error in history around.

The ultimate source of valueIt's not that Greer dismisses Smith out of hand. A formidable historian, Greer contextualizes Smith in his time and place, and acknowledges his appeal, properly crediting him as the father of modern economic thought.

But if he is the father, Greer says, he spawned a few centuries of lopsided thinking and out-of-balance economic growth by missing one key element in his thesis. As Greer explains

Once again we can begin this exploration with Adam Smith. The Wealth of Nations begins with the following sentence: "The annual labor of every nation is the fund which originally supplies it with all the necessities and conveniences of life." This same concept, variously phrased, forms one of the least-questioned assumptions in modern economics; even most of those who dispute it offer what are at most slight variations — arguing, for example, that the labor of previous years embodied in capital is also crucial to understanding the economic process. Left unrecognized is the crucial fact that the annual labor of a nation would be utterly useless without the goods and services provided free of charge by Nature, which enable labor to be done at all by making human life possible in the first place and by providing all that labor with something to labor on.

This is no idle or abstract philosophical point by Greer. It's not an "angel dancing on the head of a pin" question whose presuppositions are more formulaic and perfunctory than legitimately critical. The architecture of the argument is grounded in the real world of physical realities which, however much we might wish to eschew them through fiscal abstractions, is the beginning and the end, the alpha and the omega, the final analysis of all legitimately viable discussions of the world's true physical wealth. And no where is this more clear than in our energy-based economy.’

CommentIf I understand Greer’s assertion right, it is Greer who gets Smith’s point ‘way, way wrong’. Let’s take that first sentence again: "The annual labor of every nation is the fund which originally supplies it with all the necessities and conveniences of life.”Now, take David Greer’s supposed rebuttal of Smith’s isolated opening sentence:

“Left unrecognized is the crucial fact that the annual labor of a nation would be utterly useless without the goods and services provided free of charge by Nature, which enable labor to be done at all by making human life possible in the first place and by providing all that labor with something to labor on.”

Being kindly by nature, I would suggest this rebuttal is somewhat forgetful of the obvious role of nature in the evolution of all animals, including the hominine primates. All organic entities live off nature. Not all of them toil or toiled in the sense used by economists, including by Adam Smith. True, birds build nests, Ants build hills, beavers build dams, and spiders spin webs, but this toil is for themselves in breeding formation, it’s not for co-entities of the species. There is no special effort on behalf of con-specifics. The ones who do the building, use them. Nor was there building for others for millions of years in the hominine line.

Smith’s point about toil referred specifically to the propensity to ‘truck, barter, and exchange’ (ignore truck and barter for this discussion) associated with exchange, but be clear that the millions of years of ‘exchange’ in societies (not ‘trade’) made the hominine line different from all previous evolutions and humans took that propensity to a unique level once property was invented after leaving the forest.

So back to Smith on toil in Wealth Of Nations. ‘"The annual labor of every nation is the fund which originally supplies it with all the necessities and conveniences of life."

What is wrong with that? Apples growing on trees do not detach themselves and deliver themselves to consumers a continent away, and neither did they deliver themselves to humans in the next valley. Nor does iron in the ground become forged by itself – even fire had to be discovered and harnessed by human intelligence. All the products of toil from nature were there for millions, even billions, of years, and would still be there unused if the hominine lines had all disappeared together without at least one line evolving into early humans, and still could have perished in a bush fire or flood. As it was, the human line went close to a few thousand, according to the genetic record.

Toil is the foundation of human life, which without exception depends on the bounty of nature and the fruits of labour.It is not Adam Smith who is flawed on this particular issue (though he may have been, not surprisingly for an 18th-century moral philosopher before 20th-entury science, on other issues). I cannot say the same, being charitable, for John Greer, who does have the advantage of 20th-century science, and therefore has no excuse.

As for Lindsay Greer who claims to “love the way John Michael Greer's latest book, The Wealth of Nature, opens, with a good skewering of the premise on which the modern pseudo-science of economics depends.”

I suggest politely that she reconsider her use of the word ‘skewering’ – it is disrespectful and says much about her knowledge of Adam Smith’s non-pseudo-economics, which if she read more, she might realize that Smith’s political economy was quite different to the modern version of economics that is attributed to him.

Adam Smith and Darwin: new book by Robert Frank

“Since Darwin, the pioneering naturalist, never thought of himself as an economist, the question seems absurd. Yet his understanding of competition describes economic reality far more accurately than Smith’s. Within the next century, I predict, Darwin will be seen by most economists as the intellectual founder of their discipline….

…. In a nutshell, Darwin’s simple insight reveals that the modern economy is not only far less efficient than Adam Smith’s modern disciples think it is, but also that it would be relatively easy to improve matters. That simple truth will someday be self-evident. But until then, the wasteful aspects of the competitive process will continue to impose enormous costs on everyone.”

CommentPresently, I am reading Robert H. Frank’s book, ‘The Darwin Economy: liberty, competition and the common good’ , Princeton University Press, September, and I shall post my review of it shortly.

The link in Ocala.com above is not a review – it presents Robert Frank’s views without much comment across 6 pages. Follow the link and see what you make of it. We shall discuss it in the coming week.

Saturday, September 17, 2011

Mirror Neurons and Smith's Sympathy

Nicholas Baumard writes (23 June) in The International Cognition Institute (HERE): and takes on a topic which has appeared with increasing regularity recently and, while appreciated as a step towards greater understanding of Adam Smith’s actual contributions, it still leaves much that is not understood.

“OK, I admit. Adam Smith never talked about mirror neurons. So why am I bringing this topic up? Because Smith actually did, in a way, tackle the debate about mirror neurons and empathy.

What is this debate? In recent years, empathy, understood as the capacity to recognize and, to some extent, share feelings (such as sadness or happiness) that are being experienced by another sentient being, has received more and more interest. In particular, the study of the neural underpinnings of empathy has received increased interest following a Behavioral and Brain Sciences target article published by Stephanie Preston and Frans de Waal, following the discovery of mirror neurons in monkeys that fire both when the creature watches another creature perform an action as well as when they perform it themselves. In their paper, they (as well as others like Gallese) argued that perception of the object's state automatically activates neural representations, and that this activation automatically primes or generates the associated autonomic and somatic responses, unless inhibited.

But what does any of this have to do with Adam Smith? Like modern psychologists and anthropologists, Smith thought that our capacity to experience feelings about the feelings of others was the basis of social life. In fact, his Theory of Moral Sentiments starts with these words:

"How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it. Of this kind is pity or compassion, the emotion which we feel for the misery of others, when we either see it, or are made to conceive it in a very lively manner. That we often derive sorrow from the sorrow of others, is a matter of fact too obvious to require any instances to prove it."

And for those who are tempted to doubt the connection between Smith's view of sympathy and its modern counterpart, he immediately adds that it is automatic:

"As we have no immediate experience of what other men feel, we can form no idea of the manner in which they are affected, but by conceiving what we ourselves should feel in the like situation. Though our brother is upon the rack, as long as we ourselves are at our ease, our senses will never inform us of what he suffers. They never did, and never can, carry us beyond our own person, and it is by the imagination only that we can form any conception of what are his sensations."

So does this mean that we should see Smith as the 'big ancestor' of the modern mirror neuron theory? Not so fast. Actually, my point is that Adam Smith had anticipated some of the weaknesses of the mirror neuron theory.

Although Smith agrees with modern advocates of empathy that humans have a unique capacity to be moved by the feelings of others, he disagrees about the actual mechanism. We do not feel pain for others because their emotions automatically activate similar emotions in us. Instead, it is because we understand their situation:

"Sympathy, therefore, does not arise so much from the view of the passion, as from that of the situation which excites it. We sometimes feel for another, a passion of which he himself seems to be altogether incapable; because, when we put ourselves in his case, that passion arises in our breast from the imagination, though it does not in his from the reality."

Indeed, says Smith, we are sometimes moved by others' situations while not sharing the same emotion:

"We blush for the impudence and rudeness of another, though he himself appears to have no sense of the impropriety of his own behaviour; because we cannot help feeling with what confusion we ourselves should be covered, had we behaved in so absurd a manner."

If the advocates of mirror neurons were right, we should experience the same emotions as others. But this is not the case. We do not automatically imitate others' emotions. Instead, we experience our own emotion, which depends on our interest in the other's situation: if a friend is in a bad situation, whether or not he feels bad at the time, we will be sad; in contrast, if an enemy, someone for whom we have some antipathy, is in a bad situation, we may actually be happy; and if a friend feels, say, jealous of his partner, we won't be jealous as well, we will, depending on our opinion of the situation, be sad as well, or maybe angry at our friend who is unjustly jealous. In all these cases, others' emotions do not automatically generate similar emotions in ourselves (a point that is well emphasized in Anderson and Keltner's reply to Preston and de Waal). In other terms, it is not clear that humans have a capacity for empathy (to share someone else's emotions) rather than a capacity for sympathy (to share someone else's interests).”

Comment
Follow the link and read some more. Also, best if you read Smith’s “Theory of Moral Sentiments” (1759), bearing in mind that his book covers much of his lectures to his moral philosophy class, which were also supported by his students undertaking additional ready and attending regular tutorials where they read their essays and discussed set questions. With today’s shorter attention spans and less stylish reference books, quite different in their 18th-century literary style than today’s, reading Smith may take some effort.

The behavioural school consists of psychologists, sociologists, and some pretty sharp economists of the neoclassical school. The latter realized quickly that their observations of behaviours in their ‘games’ did not correspond to their economics beliefs that they (wrongly) understood were rooted in the Homo economics of the rational calculus in their theory, attributed, surprisingly to Adam Smith. I exchanged emails with a Professor Cramer some years back drawing his attention to this wrong attribution in a multi-author paper in which he featured. He dismissed my comments on ground that he did not write that part of the paper – it was another one of the authors – as if that was a sufficient grounds for dismissing my observation that the reference to Adam Smith on the invisible hand was inaccurate (a mild rebuke as these exchanges were in the early year of Lots Legacy) and I had expected leading economist to be aware of this fact.

On this occasion, Nicholas Baumard, contrasts Adam Smith’s assertions about sympathy with modern behavioral ideas about empathy. Smith’s ideas on self-interest too easily slide in the minds of modern thinkers into an idea of selfishness – check how Samuelson and others equate Smith with selfishness, as in ‘the selfish actions of individuals are led by an invisible hand to benefit society’, which has nothing to do with what Smith ever wrote, though it was in what Bernard Mandeville argued, and which views Smith said were ‘licentious’. Likewise Smith was not an exponent of the idea that self-interest meant selfishness, particularly in the parable of the ‘butcher, brewer, and baker’. Smith’s point is explicit that the customer must have regard for the interests of the trio to agree a bargain. In short, self-interest is not enough; the customer and the trio had to ‘other regarding’, not selfish.

I posted on Lost Legacy ‘Adam Smith On Bargaining’ making this point specific – scroll down to Tuesday 10 August:
‘Adam Smith on Bargaining and My Experience Applying His Theory’ and take a look at what TMS and Wealth Of Nations really meant.

Thursday, September 15, 2011

Adam Smith and 18th-century North America

Thurman “an American living in the Cape Fear River watershed of eastern North Carolina … a round peg in a nation of very square holes … an agnostic pantheist with Taoist/Buddhist tendencies, a democratic socialist, and an unexpected entrepreneur” writes (14 September), Thurman’s Notebook, (HERE):

“Corporate America: Pillaging the Wealth of Nations”

Adam Smith, author of that classic 1776 economic treatise The Wealth of Nations, is considered by many to be the father of modern capitalism, despite the fact that the term wasn’t coined until many decades after his death. Mr. Smith favored free markets – between competing individuals providing similar products or services within local communities – arguing that in such situations it is within the rational self-interest of all to produce one’s very best work at the lowest possible price and behave in a fair and decent manner.

CommentExcellent start on the modern myth that Adam Smith wrote about (and was an ‘apostle’ of) capitalism, a word unknown in English until 1854 when Thackeray used it in his novel, The Newcomes. So well done.

However, Thurman perhaps then spoils his winning streak by creating (or confirming) another only partly true idea that Smith ‘localised’ commercial society ‘between competing individuals providing similar products or services within local communities’. When speaking of what we call the ‘micro’ level we should not forget the very widespread source of market provisions in 18th-century central Scotland and the parts of England he knew well (such as from his six years in Oxford) and of both urban and rural France in he three years tour there. It also may downplay his firm support for free trade with foreign countries world-wide, and its importance, within the constraints of the need for tax revenue (there was no income tax when he lived) making some residual tariffs still necessary (that is why he thought absolute free trade was ‘utopian’; see Wealth Of Nations, Book IV, chapter 2, para 43, p 471). Even removing expenditure on unnecessary wars, this left the need (‘defence is more important than opulence’) for maintaining defence expenditure on necessary wars against threats of ‘barbarian’ invasions and also the need for an expanded national agenda of spending on education (‘little schools in every parish’, all 60,000 of them) and health (‘loathsome deceases’), which he also advocated in Wealth Of Nations (Book V).

Thurman: “Smith was correct, but he never intended that his ideas be applied on the grand scale many today would assert. He knew that when any business concern grows beyond serving a local or regional market, the profit motive can easily metamorphose into a much more dangerous lust for unhealthy levels of power and prestige.”

CommentYes, but a local markets were also dominated by formal local monopolies – the ancient Guilds, legal since Elizabethan times, could and did ‘organise’ little butcher shops, small tradesmen, mechanics, carpenters, mercers, tailors, printers, etc., into strict monopolies, including strict laws about apprentices, and the street markets of many towns too were regulated. These people often ruled the towns and restricted competition. Merchants as an ‘order’, exerted influence over the legislature, detailed in Wealth Of Nations. However, they were never similar to “corporate conglomerates”.

Thurman: “At the time Smith wrote Wealth of Nations, the American colonies were entering an armed conflict to throw off the oppressive yolk of what we today might call fascism (an overly cozy relationship between business interests and government). It strikes me as odd that so few now recognize that the Revolutionary War was a fight against abuse of government power by wealthy business interests of the day. That’s what the original Boston Tea Party was all about folks! The one today? Not so much.”

CommentSurely you are a trifle hyperbolic? 18th–century British colonies as ‘fascism’? Nobody would describe living in the British colonies was an ‘oppressive yoke’, except the African slaves in servitude to the colonists. For ‘oppressive yokes’ try living in the Spanish colonies with their vast feudal estates, and primogeniture, with entails, which several legislatures in the British colonies abolished, making land cheap and wages expensive, and over the decades, compared to stagnant South America, made the North American colonial economy grow and become prosperous. As for ‘fascism’, it is surely a gross exaggeration and a gross distortion to compare the relative freedom of the colonial states with mass movements of ideological, sometimes, racist, fanatics and street rabble-rousers, of modern fascism? This denudes fascism of its uniquely modern awfulness. Washington, and company, were key members of the colonial elite, and were not excluded from its rewards from their local power before the revolution.

Abuse of ‘government’ power? It was ‘government power’ all right, but those powers were what all pre-democratic governments exercised, with 18th-century Britain probably more relaxed and restrained than those absolutist governments on the continent, which were ‘tyrannical’ in the extreme (imprisonment without trial, non-judicial capital punishment, etc.). Britain had the restraints of a ‘partially elected’ legislature, centuries the rule of law and a modicum of liberty from Magna Carta, habeas corpus, trial by jury, a judiciary, and a constitutional monarchy (two Kings were removed, Charles II by Cromwell in parliament the 1640 and King James, again by votes in a properly constituted parliament in 1688). Such constitutional monarchy was not found in the rest of Europe, nor anywhere else in the world. The US Constitution and its laws drew upon on British precedent and ancient laws.

Thurman: “The British colonies, which grew out of corporate sponsored plantations in the New World, had reached a stage of economic development where they no longer really needed protection and resources from the Crown to survive.”

Comment

Correct. Adam Smith recognized that fact, and he argued that if the British colonies were unwilling to pay for their defence by British taxpayers (as they showed they were not), then Britain should withdraw, sign a commercial treaty with the colonies (free trade), and restrict Britain’s expenditures commensurate with ‘the real mediocrity of her circumstances’ (see the very last line in Wealth Of Nations). Smith regretted the King’s choice of a contest of arms, in which the King refusal the compromise on anything, meant he lost everything.

Thurman:“In fact many colonial businessmen struggled under an oppressive array of taxes, tariffs, and regulations designed to funnel greater profits to a few well favored corporations and their shareholders back in England. These legal obstacles were enacted at the behest and to the advantage of powerful business interests close to and within the British government, but had the effect of stifling the honest efforts of many less well connected colonial businesses. Sound familiar?”

CommentA fair summary. Minor point: ‘Britain’ was (and is) not synominous with ‘England”. The British colonial tobacco trade was largely run through Glasgow, in Scotland, whose merchants ran large plantations in Virginia, etc.,. Also using ‘corporations’ loosely in this context is anachronistic.

However, Smith did expose the inequities of the trade balance between Britain and its colonies. By establishing a general monopoly on trade between Europe and the British colonies (allowed to develop with far greater freedoms that their south and central American counterparts under the Spanish and the Portuguese absolute monarchies) the traders in the British colonies, and, therefore, the consumers, were disadvantaged twice over. They paid high import prices on British goods and received low export prices for colonial exports, because all goods inwards and outwards had to be delivered in British- owned ships with British crews, under the Navigation Acts from Cromwell’s times. The Navigation Acts were originally aimed at ensuring a large British navy primarily to defend the islands and, secondarily, its colonies from foreign navies. That role was compromised by extending it to enforce a monopoly of the colonial trade, which monopoly was policed by the Royal Navy and British custom officials and local courts in the colonies. Not surprisingly, Britain was the colonies largest supplier and largest customer. European-sourced imports and exports were carried in British ships, thus eliminating foreign price competition.

Thurman’s main problem is trying to link too closely the problems that led to the rebellion to modern problems. Follow the link and continue reading ‘Thurman’s piece. At least Thurman appears to have read Wealth Of Nations, which is a good sign.

Tuesday, September 13, 2011

Where Adam Smith Did Not Go to University

Jackie Kemp, in The Guardian, writes “Competition for places at Scottish universities will be fierce in 2012” (HERE):

“Adam Smith, Charles Darwin, a couple of signatories of the American Declaration of Independence and Gordon Brown all graduated from Scotland's premier university – Edinburgh. A degree from the ancient institution – recently ranked 20th in the QS world rankings, above Berkeley, California, and the London School of Economics – is the gold standard of Scottish education. But some fear that next year the creme de la creme of Scottish schools could miss out on places, turned away in favour of students prepared to pay English gold.”

CommentAmong the many fine attributes of Edinburgh University, having Adam Smith as a graduate - or even as a student - was not one of them.

Adam Smith did not graduate from Edinburgh University.

Adam Smith attended Glasgow University from 1737 to 1740. He won a Snell Exhibition to Balliol College, Oxford from 1740 to 1746. His LL.D was awarded by Glasgow University in 1763.

Adam Smith gave a series of pubic lectures on Rhetoric in Edinburgh town - not the university - from 1748-51, sponsored by Lord Kames and from his paying audience, including some divinity and law students, he earned £100 a year (according to David Hume, who did attend Edinburgh University in 1723).

Friday, September 09, 2011

Was Adam Smith 'The Father of Economics'?

A debate on whether Adam Smith was the ‘father of political economy’ is under way among the history of economic community. I offered this brief comment today:

Crediting Adam Smith as the "Founding Father of Modern Economics" is unhelpful though now ubiquitous. It started with J. B. Say and has had a long gestation period.

In the 1930s, Oscar Lange (1937-, 38; and 1945), argued that socialist planning was superior to capitalist markets because socialist planners would do better in their planned interventions than Smith’s unreliable and uncontrolled invisible hand.

Paul Samuelson, argued the now ubiquitous view, that Adam Smith’s invisible hand meant markets were superior, though he got Smith’s words wrong in popularizing the myth that the IH meant markets enabled ‘selfish’ people to act unintentionally for the public good (Economic, 1948, p 36). This justified Smith as the ‘father of economics’ in contrast to Soviet planning.

At the UK HET annual conference this week (Balliol, Oxford) Professor Arild Saether, presented a detailed paper, “Pufendorf – Hutcheson’s and Smith’s Most Important Source?”, with clear details of Pufendorf’s (1632-1704) priority in many key economic concepts in his widely read and used books in many European languages, including English (Smith read Latin too) in European Universities, including Glasgow in Scotland.

‘if Adam Smith, as Jean Baptiste Say claimed, can be called the father of political economy, Samuel Pufendorf deserves to be remembered as the grandfather’.

I believe that there is a case to be answered here, let alone whether to continue the usefulness and correctness of the popular claims about our discipline’s parentage. We might also wish to re-look at other myths, their origins and purpose.

[A report of the Conference of the UK HET Society will follow this weekend.]

Gross and Imaginative Exageration

“It's a choice that goes back 200 years, to when Adam Smith first proposed that the modern economy seemed to work like an "invisible hand" to regulate selfish behavior into socially beneficial results. We think Smith hit on something new, but he didn't. We humans do what every social animal does: help the world by helping ourselves. But it wasn't long before a rival narrative appeared -- that capitalism was a savage beast laying waste to everything it its path. It would take the clenched fist of the workers, backed up by the intelligence of an educated elite, to prevent this monster from immiserating everyone in its path, from workers to the middle class.

Ever since, the choice for moderns has been this. Do you believe in the Invisible Hand or the Clenched Fist? I'd say the choice is obvious. The Clenched Fist has failed every time it's been tried, from the French Revolution to the Bolshevik Revolution, from the New Deal to the Obama stimulus.”

CommentI have no comments on the merits of Obama’s stimulus proposals (Lost Legacy does not comment on the politics of other countries in which I do not vote).

Christopher’s article is fairly typical of its genre – the wholesale myth of Adam Smith’s “invisible hand”, invented and perpetuated by US academe from the 1940s as part of the successful Cold War struggle against the influence of Soviet 5-year Planning propaganda. There had been an oral tradition about Adam Smith’s invisible hand metaphor from the 1920s, led by A. C. Pigou from Cambridge, England, and spread on a larger-scale by the same tradition at Chicago, USA, especially when Paul Samuelson (ex-Chicago, MIT) published his popular textbook, 5 million sales in 19 editions from 1948; his readers (6-8 million) spread all over the world. The myth is now ubiquitous in media, politics, government ministries and popular memory.

Christopher subscribes to the myth and thereby perpetuates it. Adam Smith never “proposed that the modern economy seemed to work like an 'invisible hand' to regulate selfish behavior into socially beneficial results”.

Christopher’s error is both elementary and profound. To write: “like an "invisible hand" turns the metaphor into a simile. Smith never used the “invisible hand’ as a simile, for him it was a metaphor, thereby quite different. (If you are not sure of the difference, consult a dictionary; for Smith’s deliberate meaning in using a metaphor, see his ‘Lectures in Rhetoric and Belles Letter” [1763] 1983, p 29).

Smith did not write about the IH “regulat[ing] selfish behavior into socially beneficial results”. His ‘Theory of Moral Sentiments (1759) has quite a lot to say about ‘selfishness’, none of it condoning it. The word ‘selfish’ was inserted into Paul Samuelson’s account of Smith’s use of IH and is pure invention. Moreover, Smith reference to ‘public good’ referred to the more acceptable, though narrow, point that the investment of capital in ‘domestic industry’, instead of sending it abroad at greater risk, added to “annual revenue and employment” (such as the ‘whole is the sum of its individual parts’), and this Smith regarded as a public good.

As for Christopher’s literary allusion to a “Clenched Fist”, I won’t follow that irrelevancy and grant it even negative existence. Smith lived in a mercantile state, noted for its domestic protectionism against domestic competition at every level (The Guilds, Apprentices Acts, Settlement Acts, Anti-labour Combination Acts, local Magistrates setting local wages, Primogeniture and Entail Laws) and all bolstered by national protectionism against foreign competition through tariffs and prohibitions, policed by the Navigation Acts. Britain was not a competitive environment at all.

Balliol, of course, is the college at Oxford University that Adam Smith attended from 1740-46, and from which he developed an hostile view to the then lax teaching and tutoring regime (‘prayers twice a day and lectures twice a week’), mentioned in Wealth Of Nations (Book V), compared to the serious work he had to do as a student at Glasgow University 1737-40 (classes and tutorials from 7.30am to mid-afternoon).

I hope to visit Balliol’s library to discover which books were available to Adam Smith while he was there for six years, with only two weeks a year off, largely engaged in self-study.

I shall report on those papers I hear while there. But no blogging until I return.

Adam Smith facts, yes; no-fees in Scotland for Scots, also yes.

“This is why the University of Edinburgh exists. That is its mission statement. The university at which I studied has a proud history of holding to this mission. Its graduates have contributed enormously: Charles Darwin, Alexander Graham Bell, James Clerk Maxwell, Arthur Conan Doyle, Robert Louis Stevenson, J.M. Barrie, and Sir Walter Scott; Adam Smith and David Hume (though he was kicked out for being an atheist).”

CommentThere are no University fees for students whose normal domicile has been in Scotland. For all Scottish students there are no fees and this is to continue by decision of the Scottish government. Only English, Welsh and Northern Ireland students are to pay the new fees (as per their own students who pay fees for attending their universities).

Also, it is important to be correct historically.

Adam Smith was never a student at Edinburgh - he was educated at Glasgow 1737-40 (fees paid by his mother and guardians) and Oxford (Balliol College), fees paid by his Snell Exhibition (£40 per year) 1740-46). He lectured on Rhetoric in the Town of Edinburgh (not the University), post Oxford, 1748-51, and then was appointed Professor at Glasgow (1751-64).

He was awarded his LL.D by Glasgow in 1763 while a Professor. There is no record of his graduating at either Glasgow or Oxford as BA or AM. It was a condition of the Snell Exhibition that candidates for Balliol had not graduated 'anywhere'. Apart from his LL.D from Glasgow, he did not receive a degree from anywhere else.

While Adam Smith knew, discussed with and socialised with many graduates of and professors of Edinburgh University, including William Robertson, the Principal, he never attended the university nor taught there.

The issue of fees for non-Scottish domiciled UK students is quite separate from claims about Adam Smith.

Monday, September 05, 2011

Very Short Post

This is a very short post and comment caused by the extremely limited original post (HERE):

“adam smith laissez faire,”

‘Alan Greenspan argues that, while Smith did not coin the term laissez-faire, yquot ;it was left to Adam Smith to identify the more-general set of principles that ...”

CommentNot only did he not ‘coin the term laissez-faire’ – he never used it either.

Greenspan is revising much of what he told his us in the past – including his partial rejection of his former firm belief in ‘an invisible hand’ - and a good place to start his revision – if that is what it is – of laissez-faire as taught in economics is to read Jacob Viner’s essay on Adam Smith and laissez-faire, published in 1927 and available, at least second-hand, in an Augustus Kelly edition (try Google and Amazon).

Until I see Greenspan’s statement in full, I cannot comment further on this issue.

[Any reader who can get hold on a copy, I would be most obliged if they can provide one to me.]

Sunday, September 04, 2011

New Adam Smith Blog Announced

A new Adam Smith blog has joined Internet discussions, The Sustainable Adam Smith (HERE):

It is authored by Nils M. Langenborg, gMBA who states that his goal in the Blog is “Through increased knowledge of Adam Smith’s works, we will educate people, government and business to the totality of his thinking and thereby balance out its effects on our world. Smith was not a capitalist, and our goal is to showcase his complete thinking on the interaction between consumers, business and government.”

Comment
Follow the link and note how his take on the IH metaphor is a welcome change from those who endlessly repeat the modern myth of Smith’s supposed meaning when he used the metaphor of ‘an invisible hand’.

Sustainable Adam Smith is a welcome addition to the debate on Adam Smith and his relevance today - though I have some reservations about aspects of Nil’s analysis (semi-allies are better than none), it brings a fresh approach to modern appreciation of Smith’s work.

Friday, September 02, 2011

US Professors Polled on Favourite Economists

Gary Price and Shirl KennedyHERE: taken from EconJournal WatchHERE: by William L. Davis, Bob Figgins, David Hedengren, Daniel B. Klein, who surveyed 299 US professors of economics

“Economics Professors’ Favorite Economic Thinkers, Journals, and Blogs (along with Party and Policy Views) (PDF)
We sent a survey to economics professors through out the United States, and 299 returned a completed survey. The survey asked about favorites in the following areas:
economic thinkers
who wrote prior to the twentieth century
of the twentieth century, now deceased
alive today
age 60 or over
under the age of 60
economics journals
economics blogs
Other questions, as well, were asked, but it is those about favorites that make the focus of the present paper. We relate those responses to party-voting and a score on a policy index based on 17 policy questions.
First-place positions as favorite economist in their respective categories are Adam Smith (by far), John Maynard Keynes followed closely by Milton Friedman, Gary Becker, and Paul Krugman. For journals, the leaders are American Economic Review and Journal of Economic Perspectives. For blogs, the leaders are Greg Mankiw followed closely by Marginal Revolution (Tyler Cowen and Alex Tabarrok).”

Full account of the data is in the original article (EconJournalWatch) (follow the link).

CommentIf only it was obvious that the popularity of Adam Smith was based on a close familiarity with his works and their ideas. However, sorry to say, knowledge of his Wealth Of Nations is somewhat less than thorough – even depressingly below examinable undergraduate standards – and of his Moral Sentiments (which is crucial to understanding WN and the source of the errors associating Smith to the modern myths of Homo economicus and mathematical modeling of supposed maximising marginal utilities).

As for the widespread belief in an actual invisible-hand (see my debates with Daniel Klein in Econjournalwatch last year), this enthusiastically drives US economic professors to put Smith on top of any list – the IH metaphor is misuse by modern invention by the professors from Econ 101 to graduate courses and conversations with politicians and the media.

It was noted by me that David Ricardo did not appear in the lists at all, which is at least a consolation prize for the otherwise depressing realisation that Smith is prized by top US economists largely for the wrong reasons.